Remote-controlled drones that can record aerial video footage on to smartphones are being sold through retail chains such as Harvey Norman for as little as $350.

It is understood the devices - traditionally used for covert surveillance and surveying - are becoming increasingly popular with individuals and companies. Australia became the first country to allow private drone use in 2002.

Drones can be controlled by smartphones and video footage and images can be shared instantly on social media such as YouTube.

Privacy experts are alarmed by the trend, warning the technology could be used as an aerial peeping Tom or to spy on people.

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The Australian Privacy Commissioner, Timothy Pilgrim, has written to the Attorney-General about the trend. ''It is concerning that this type of equipment can be easily purchased and used by individuals, potentially without any limitation on their use,'' he said.

Associate Professor Kevin Heller, from the University of Melbourne law school, said the idea that private citizens could buy drones and record footage on to their smartphones had serious privacy implications. ''It doesn't take a genius to imagine flying one over the neighbour's lawn and capturing photos of them nude.''

To date, 29 organisations have approval to operate drones in Australia - including land surveyors, the Victorian fire and emergency services and Yamaha Motor Australia. Another 15 applications are awaiting approval. (Victoria and NSW have almost half of the current licences.)

Drones installed with video cameras have long been used by the military and more recently by law enforcement agencies. Last year, police departments in America began using aerial drones for surveillance.

In the US, some operators are also flying drones for commercial purposes, whether they are journalists chasing a story or paparazzi chasing the bird's-eye celebrity shot.

Among the drone operations permitted by Australia's Civil Aviation Safety Authority are aerial photography, surveying, advertising and inspection of power lines.

But David Vaile, the executive director of the cyberspace law and policy centre at the University of NSW, wants more transparency on drone use.

''Where are the boundaries of what is being regulated and within that, what are the issues being regulated? Getting clarity on whether the privacy concerns have been thought through and whether there's legislation in place to protect the public would be of great benefit,'' Mr Vaile said.

Harvey Norman began selling the Parrot AR. Drone 2.0 - controlled through a smartphone - late last year.